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Will Microsoft's Acquisition of Skype Advance Social Search?

Winding-Road-

It's difficult to imagine the impact Microsoft's partnership with Facebook will have on paid search, but let's try. One thing's for sure: The two companies have gotten pretty chummy. Combining likes with search could have a big impact on Bing search. Google responded to the move toward social search with the +1 button. Marin Software VP Matt Lawson calls it a "war of features" to prompt people to search more per session.

Analysis from eMarketer suggests Facebook has become the "social media venue of choice among online buyers." Pointing to research from Compete, eMarketer notes that the number of online buyers using retailers' Facebook pages increased 3 percentage points compared with the previous year, bumping to second place blogs, forums and review sites. And, one-third of respondents "'like' six or more retailers or consumer products companies on Facebook."

Search has traditionally been the lead generator for company Web sites. But a joint study from Shop.org, comScore and Social Shopping Labs reveal 53% of Facebook users reached a retailer's Web site from their Facebook page, and 35% said they would likely make a purchase through Facebook, according to eMarketer.

For now, at least, most of that social experience resides with friends. Earlier this week, Facebook announced a partnership with Skype (which Microsoft intends to acquire for $8.5 billion) that gives members in the social network pretty clear video capabilities. The deal hasn't closed, but it's well on its way.

Microsoft already has technology for unified communications. Would Facebook have acquired Skype if Microsoft didn't? Did Microsoft acquire Skype for Facebook? Did Google bid on Skype?

Let's consider, for a moment, why Microsoft took a $240 million equity stake in Facebook in 2007, and never looked back. The Redmond, Wash, company tried to buy Facebook, but failed, so the company became a partner instead.

A former Microsoft exec, who has experienced C-level meetings with CEO Steve Ballmer, said he doesn't think Microsoft would have bought Skype to help Facebook compete with Google. "Steve is one of the smartest people you'll meet, processing-power smart," he said. "But he's not a complex multivariate thinker, meaning he doesn't think 15 chess moves out. So that's why I don't think anything more complex went into the decision, other than they thought the company would make a strong asset."

Similar to other technologies acquired by Microsoft -- such as the speech engine Tellme -- the Skype technology will likely end up in other Microsoft products.

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